Prime Minister Ishiba
Japanese Prime Minister Shigeru Ishiba has a clear agenda as international leaders converge in Canada for the G7 Summit—persuading President Trump to drop the auto tariffs.
Wishful thinking? Who knows, but Ishiba is definitely making it a priority.
The details: The Japanese Prime Minister—amid all the discussions at the three-day summit taking place from June 15 – 17—has made it clear that he plans to discuss the tariffs with Trump on the sidelines while in Kananaskis, Alberta, which will mark the two leaders' second in-person encounter.
The goal?
Convince President Trump to drop the 25% tariff he imposed on Japanese vehicles.
Urge Trump to pull back on the 24% across-the-board levy that Trump touts as a reciprocal tariff.
What they’re saying: "I will make every possible effort to reach an agreement that benefits both Japan and the United States,” said Ishiba, (via Reuters).
Why it matters: 25% U.S. tariffs on cars and auto parts could cost major Japanese automakers—including Toyota Motor Corp., Honda Motor Co., Mazda Motor Corp., and Subaru Corp.—more than $19 billion this fiscal year alone.
Between the lines: For Ishiba, the stakes tied to convincing Trump to pull back on the tariffs go well beyond putting Japan’s automakers on better footing in the highly coveted U.S. market.
The prime minister and his ruling Liberal Democratic Party face a major election next month—after taking a serious blow in November that left him dependent on other parties to stay in power.
Another dismal election could crumble Ishiba’s government, forcing Trump to have to deal with an entirely new Japanese administration when it comes to trade negotiations.
Data for car exports to the U.S. for April showed that volume in dollars dropped by nearly 5%, but the number of cars increased—which likely means that automakers are absorbing the costs, says a senior analyst at Mizuho Bank.
It all puts Ishiba in a tricky position—trying to persuade Trump to rethink the tariffs, while not appearing too weak in Japan politically in negotiating a new deal.
What they’re saying: "The most important thing is that Ishiba does not cave in for a bad (auto) deal,” said Joseph Kraft, Financial Political Analyst, Rorschach Advisory in Tokyo, (via Reuters).
Bottom line: The stakes couldn’t be higher for Ishiba, Japanese automakers, and their U.S. dealers for the Prime Minister to sway President Trump to consider a new auto trade deal. However, given the recent news that the President is considering raising auto tariffs, the three-day G7 summit likely won’t be enough time to get Trump to roll back any auto tariffs already in play.
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